According to the classification of the Inter-Governmental Panel on Climate Change the project
"Construction of the Steam-Gas Electrical Power Station "Kuban" (Novokubansky district of
Krasnodarsky region, Russian Federation) and of the Local Heating Systems in Krasnodarsky region"
(Project) is directed to the decrease of anthropogenic impact on climate which is exhibited in reduction of
green-house gases emission as a result of the increase of the efficiency of energy resources use.

The decrease of emissions are achieved in the way of reconstruction to the present used Municipal heating
systems installing heating pumps to supply with heat houses, industrial spaces and constructions of
Krasnodarsky region foreseen by the Project.

Taking into account the deficit in supplying with electricity Krasnodarsky region and with a purpose to
provide with the electrical energy the designed local heating systems it’s planned to build up a
steam-gas electrical power station called "Kuban" in Novokubansk city of Krasnodarsky region with
the projected capacity 900 Mw in the framework of the Project realization.

The use of steam-gas cycle which has a higher rate of efficiency gives a possibility to increase the
effectiveness of use the fuel energy simultaneously reducing green-house gases emission per unit of
produced electrical energy.

Decisions stipulated by the Project allow refusing from the share of exploited municipal heating boiler
plants network and heating systems to reduce losses existing in them, and in an outcome to increase
effective use of souses of energy, and decrease green-house gases emission.

The reduction of number of staff servicing municipal heating system and boiler-houses, is compensated by
necessity of staff for periodic maintenance service of heating pumps for designing local networks.

The climatic efficiency of the Project can be reached in combination of two modern technological decisions
on this Project. It permits to reduce considerably green-house gases emissions under the condition of
provision the customers in Krasnodarsky region with heat and electrical energy.

The volume of finance of the Project is $ 1 620 000 000:

The schedule of financing (2000 - 2003 years)

2000 year

$ 162.0 million

2001 year

$ 618.0 million

2002 year

$ 470.0 million

2003 year

$ 370.0 million

The schedule of introduction of potencies

First turn (300 Mw)

2002 year

Second turn (300 Mw)

2003 year

Third turn (300 Mw)

2004 year

2. The calculation of green-house gases emission of boiler-houses of Krasnodar region before realization
of the Project (in ÑÎ2 equivalent)

3. The calculation of green-house gases emission of the Project "Construction of the Steam-Gas
Electrical Power Station “Kuban” (Novokubansky District of Krasnodarsky region, Russian
Federation) and Local Heating Systems in Krasnodarsky Region” (in ÑÎ2
equivalent)

Characteristics of sources

Real indexes

in Mw

Expenditure of standard fuel in

thousand tons per year

Volume of greenhouse gases emission (in ÑÎ2 equivalent ) in million tons per
year

4. The reduction of greenhouse gases emission in result of realization of the Joint Implementation
Project "Construction of the Steam-Gas Electrical Power Station “Kuban ” (Novokubansky
District of Krasnodarsky region, Russian Federation) and Local Heating Systems in Krasnodarsky
Region” (in ÑÎ2 equivalent)

The positive effect of the Project is concluded in the reduction of greenhouse gases emission resulting
from the exploitation at the territory of Krasnodarsky region of municipal boiler-houses and independent
(autonomous) heating systems incinerated organic fuel.

Under the conditions of putting into action of solutions proposed in the Project climatic effect in general
over Krasnodarsky region predicted according to the calculations over the Project will reach reduction of
greenhouse gases emission not less than 2 700 000.0 (two millions seven hundreds thousand tons) tons per
year (in ÑÎ2equivalent).

In the time of elaboration of the Project documentation in according the content of the Project and its
realization the climatic efficiency is going to increase, and finally it will be assessed under the
procedure of Project certification.